Not with a whimper, but a bang. The Washington Post has an article indicating that ESPN is going to roll out a streaming service for its sports content. This lack of live sports on the Internet has kept a lot of households tethered to a costly and bloated cable TV subscription. I think what happened is that ESPN figured out they were passing up huge revenue growth by staying tethered to cable. Many households, once they cut the cable TV bill, may well end up spending more on streaming video, but it will be in small amounts....FOR EXACTLY WHAT THEY WANT TO WATCH. Choice...it's a wonderful thing.

The cable companies will limp along for a while by doing what they have been doing for several years now: ratcheting up the fee for their Internet service by 5% to 10% per year. But from a community perspective, hitching your economic future to a failed, copper-based business model is a recipe for stagnant jobs growth and a tough hill to climb in terms of business attraction.

In a surprise announcement this morning, Apple CEO Tim Cook announced that the giant computer and phone maker has purchased the Radio Shack Corporation. Radio Shack has attracted a lot of attention recently for the company's clever "The eighties want their store back" ads that attempted to highlight Radio Shack's shift in marketing strategy. But industry analysts have been uncertain that the changes were enough to bring some momentum back to the company.

When interviewed about the move, Cook had some interesting comments. "With the continuing success of our Apple stores, we wanted to dramatically expand our retail footprint, and we've nearly exhausted the big city venues. Radio Shack's most valuable asset are the thousands of stores in smaller towns and cities. This gives us an opportunity to expand quickly."

Cook went on to reveal a stunning new product line that could dramatically alter Apple's future direction. Cook explained, "We kept looking at the huge success of Maker Spaces and of products like the Raspberry Pi single board computer. Personally, I just got tired of hearing there is no innovation left at Apple. So we said, "To hell with it, let's go for broke." We are renaming the Radio Shack stores as "Apple Shacks," and the flagship product is going to be a keystone item in an entirely new Apple product line aimed at Maker Spaces and experimenters: The Apple Pi."

Norman Feisterburger, Apple's new head of the Apple Shack line of business, provided more detail about the new product. "The Apple Pi is a single board computer designed for the huge surge in interest that Maker Spaces are bringing to the hobbyist market place. The Apple Pi comes with everything you need to get into programming, house control, media control, and "maker" projects. The board has HDMI, Ethernet, and USB interfaces, and comes with 32 Gig of storage space in a micro SD card. And best of all, the Apple Pi comes loaded with the command line version of Unix and the Mach kernel that runs on all Mac, iPad, and iPhone products. We're opening up the Mac platform to a whole new generation of "makers," and we expect that the Apple Pi will become the dominant platform for development in the "Internet of Things."

When asked about the cost of this new venture, Tim Cook brushed off the financing issues. "Radio Shack has been struggling for so long, we were able to pick up the whole company, including all the stores, for a little less than $7 billion. And to tell you the truth, we came up with the idea when an intern was cleaning out some filing cabinets in Steve Job's office and she found $14 billion stuffed in a bottom drawer in an assortment of international currencies. We looked at the cash and said to ourselves, "We are getting slammed in the press for not being innovative. What this calls is a really futile and stupid gesture be done on somebody's part!" So we all shouted, "Let's do it!" I got on the phone with the CEO of Radio Shack and we closed the deal in less than a week.

Cook indicated that the rebranding of the stores will take place on April 1st, 2014, and he also hinted that a Retina-based 12" iPhone may be released at the same time.

I was in a rural community recently that is already in crisis because of poor broadband service. What they told me is that new hires for businesses in the town simply won't live there. Instead, they are locating their families about an hour and a half away and enduring two to three hours of commuting each day to work.

What are the issues? The kids can't do their schoolwork at home because of poor connectivity. The stay at home spouse can't effectively use online shopping to support living in a rural area with limited bricks and mortar stores. The kids feel cut off because social media sites like Facebook, Pinterest, and many others run slowly or not at all. Families can't use services like Hulu and Netflix and there are no video stores left. Home-based workers and home-based business development is completely stalled out because the very poor quality DSL and cable modem services in the area simply won't support two way video (e.g. Skype, GoToMeeting, Webex), moving large files back and forth, and efficient access to cloud-based services.

I still have some economic developers who look at the Netflix stats (video on demand services are using over a third of all the bandwidth in the U.S. on nights and weekends) and don't see the connection to economic development. But if you can't attract workers to your community, you also are going to have problems attracting businesses to your community. It's all one problem.

The businesses that were already in the community were screaming for more bandwidth and desperate for both more than one service provider and more than one cable path out of town. Redundancy has become a huge issue even for small and medium sized businesses as more and more business data is moved in real time between the businesses and off-site servers (i.e. the "cloud").

An article in the Wall Street Journal details a new business in Toronto that has placed WiFi sensors in major shopping and nightlife districts of the city. The sensors grab WiFi data from passing smartphones and builds profiles of what people are doing and where they are going. The data is sold to local businesses, who also allow the sensors to be placed inside their businesses. It is an interesting innovation, but has some troubling prospects for privacy. As we carry around our smartphones, tablets, and laptops, the MAC addresses in each of them provide a unique identifier for this kind of data collection. Once this kind of data is known to exist, it can be subpoenaed for civil and criminal investigations. And the government could use it as part of an investigation into your habits and whereabouts.

Maybe an Indiegogo-funded Faraday cage wallet for smartphones would be a good idea.

I ran across this quote from Steve Jobs, and while he was talking about technology devices, I think it applies to broadband and the eternal bandwidth debate as well:

“For something this complicated, it’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.”

"....people don't know what they want until you show it to them."

Exactly. Asking people what they intend to do with a Gig of bandwidth sometime in the future is not likely to produce a lot of insight, and it will almost certainly "prove" a community does not need to be a "Gigabit City." If asked, most people today will say they are reasonably satisfied with the bandwidth they have TODAY, because that is the only context of their experience.

Jobs' comment reminded me of one of my favorite all time quotes that illustrates perfectly that nothing really changes. Asked about he came up with the concept of the "car," Henry Ford said:

"If I had asked people what they wanted, they would have said 'faster horses.'"

We do broadband surveys regularly, and they can provide some very useful information, but they are just a momentary snapshot that tells you what people and businesses are doing NOW. They tell you very little about what those people and businesses may need in the future, because as both Jobs and Ford recognized, people are not very good at describing something they have never seen or used before.

I hear constantly now, "Why does anyone need a Gig of bandwidth?" The value of a Gig fiber connection is about the future, not the present. It is about preparing citizens, businesses, and the community to be able to compete for jobs and businesses over the next five to thirty years, with future-proof infrastructure that will support FUTURE needs.

If a community wants to stand still economically, then it can stay with its current copper-based telecom infrastructure, effectively freezing economic development at where it is today. But if the community wants to grow economically, retain businesses, create jobs, attract entrepreneurs, and bring new businesses, the Gigabit connection becomes a critical part of a forward-thinking economic development strategy.

Design Nine's FastRoads project is about to come online. We are currently expecting this community-owned Gigabit fiber network to start with four service providers. Design Nine has been working with the 43 FastRoads towns for more than six years, and we did the early planning, the financial modeling, helped write the grant, designed and built the network, and through our new subsidiary, WideOpen Networks<, we will also be managing the network.

The initial FastRoads network brings makes twenty-two New Hampshire towns "Gigabit Cities," with Gig services available in every community. Two of the twenty-two towns are getting fiber to the home services to more than a thousand premises. Planning to add more communities is already underway.

For more information on FastRoads, check out this article:
http://www.bbpmag.com/2013mags/may-june/BBC_May13_FastRoads.pdf

Gigaom has an interesting and detailed article explaining why the incumbents hate Netflix. The popular movie and TV streaming service is an Over The Top (OTT) service that rides on top of (over) a customer's base Internet connection. Verizon is having a peering spat with Cogent, a long haul carrier that moves a huge chunk of Netflix's streaming data around the country, and it appears that Verizon is deliberately throttling Cogent's ability to push Verizon customer video streams onto the Verizon network, with the result that watching Netflix on a Verizon network may not always work well, with stuttering, rebuffering, and/or degraded picture quality.

Verizon's beef is that they have to haul the traffic but they don't get any of the revenue paid by Verizon customers to Netflix. One solution would be to do a deal with Netflix, which would offer Netflix better bandwidth in return for a cut of revenue, or to change the Verizon business model to stop trying to punish their customers for actually using bandwidth.

But we're in a very strange time, when the incumbent phone companies are trying to cut out their copper landlines completely in a transparent attempt to get everyone to buy their Internet access via the cellular network. But this will never work, as the bandwidth isn't there, even with LTE to support services like Netflix...hence the ubiquitous bandwidth caps on cellular service. If we could wave a magic wand and move all the Netflix traffic to the cellular network, the entire North American cellular network would stop working, as it simply has nowhere near the capacity (and never will) to take a third of all the Internet traffic that is being generated just by Netflix. We have not even added in the myriad of other streaming services like Hulu, AppleTV, SimulTV, and many others.

As always, part of the solution is to deploy fiber everywhere to break the bandwidth bottleneck, and you pay for the fiber deployment by changing to a business model that gives the bandwidth away and charges for the service. When you do that, and have dozens of providers offering hundreds of services, you have the cash flow to pay for the high performance, high capacity, AFFORDABLE fiber network.

Design Nine is building those networks today....and in both urban and rural areas, turning communities around the country into Gigabit Cities. It's just not that hard.

All is coming to pass as I have predicted...this is my 38th posting about the Death of TV, and the mainstream media is finally beginning to notice. The San Francisco Chronicle has an article about what is being called "Zero TV" households, meaning that there is neither a cable TV nor a satellite TV subscription at that address. Instead, as I've been writing about for years, people are watching "TV" on their Internet feed instead, using services like Hulu and Netflix to get access to far more content than is available on the traditional cable/satellite feeds, and in a much more convenient fashion.

For communities stuck with "little broadband," the math is pretty grim. With several computers, tablets, and smartphones in the average home, every single device is now a "TV," and so you have to think about the aggregate bandwidth needed to deliver good quality video to several devices in the home at the same time. This eliminates DSL completely, despite the every present claims that DSL/copper twisted pair will get faster "Real Soon Now." It is possible to push 20 or 30 megabits over copper twisted pair, but the unspoken assumption is that you are a relatively short distance from the DSLAM and you have brand new, very high quality copper cable connecting you to that switch. But that's not the case in most rural areas of the U.S. still stuck with DSL. Their copper cable is often decades old.

Wireless broadband is also problematic. Despite the grand claims for 4G/5G/6G/UmpteenG cellular data, the bandwidth caps make it prohibitively expensive to sit at home and watch TV over your cellular data connection. Fixed point broadband wireless (i.w. WiFi, WiMax, etc.) requires line of site, which is difficult and/or expensive in most areas of the country. While fixed point wireless is going to be a very important bridge technology in many rural areas, fiber is and will remain the goal for the U.S.

Skeptics who claim it is too expensive to run fiber to most homes and businesses forget that A) it was possible to run telephone and electric service to homes and businesses decades ago and that was the old One Service--One Cable business model; B) the new fiber cable can deliver many services simultaneously, which changes the business model and makes it financially viable.

The cable and telephone companies have chosen not to compete; instead they are going to state legislatures to get laws passed forbidding municipal and county networks from getting started.

But don't worry...to paraphrase Yoda from Star Wars..."There is...another way." Restrictive legislation is nothing but a speed bump, and it's nothing to worry about....even in North Carolina.

Facebook is about to roll out voice calling between Facebook users, directly from its smartphone apps. Hmmm...lemme see...back of the envelope calculations here.....Facebook has, roughly, one BILLION users. If Facebook enables voice calling, Facebook is about to become the largest phone company in the world.

What does this mean for communities? It means that one more service is moving very quickly to an all-IP platform and away from the antiquated landline network. Telephone is dying, and dying perhaps even faster than TV. Fast, cheap broadband is going to be the community economic development engine, and communities that can't support the emerging array of thousands of new IP-enabled niche services are going to wither. It's a replay of the interstate build out, except that every community can have an exist on the interstate, because broadband is cheaper than roads. It's cheaper than water lines. It's cheaper than sewer systems. And there is plenty of money for broadband; it's just that in communities today, all that money is being stuffed in envelopes every month as payments to the cable and telephone companies, and the money is being carried by the Postal Service out of the community and typically out of the state.

Apparently some IT firms did not study the lessons learned from Hurricane Katrina. What took out most of the phone system and the broadband/Internet networks in and around New Orleans was not the high winds and rain, but rising waters. Many of the network electronics were on high ground (e.g. upper stories of buildings, above flood waters), but the emergency generators were on the ground! The water rose and flooded all the generators, and the networks went dark.

So in New York, the same thing is happening. Major Web sites are going dark because data centers are having power and flooding problems. Anyone that puts a data center in a flood zone (and lower Manhattan is a flood zone) is nuts.

The second lesson from Katrina is that you may need all your data and servers fully duplicated at another location somewhere well away (e.g. several states away) from your primary server location. If the Huffington Post Web site is dark because of power problems in New York City, that tells me they don't have a disaster recovery plan.

As more and more stuff is stored online in "the cloud," there is a growing demand for data centers, and data centers that are away from coastlines, away from flood and hurricane zones, and near high performance open access fiber networks have a distinct advantage.

Apple introduced the new iPad mini yesterday, which is an incredible piece of engineering, but to me, the more interesting story is the release of the new iMacs, which seem impossibly thin, largely because Apple has eliminated the DVD drive. Apple has always led on storage media, and the company has a long history of pushing the entire industry in a new direction, including 3.5" floppy drives, CD-ROM drives as standard, DVD drives as standard, solid state drives as standard, and now, elimination of removable media entirely.

The story behind the story is broadband. Only widespread availability of broadband has made it possible to eliminate removable storage from our computers. Apple's Mac App store and the Web have made it possible to buy any software you need directly from the 'net, so who needs a DVD drive? The interesting side effect is that broadband is green....really green. Eliminating hundreds of millions of DVDs also eliminates the cost and energy of manufacturing, storing, and shipping those DVDs. While it is true that data centers storing our content in the cloud use energy, at the same time, broadband and the cloud are eliminating lots of other energy uses.

The Danville Broadband Conference, on November 8th and 9th, is still available for the early registration price of $95. It will soon go back up to the full fee of $475, so if you are planning on going, get in on the great deal. You can register here.

The city of Danville, Virginia has implemented a long-term comeback strategy. Danville's early investment in an open access fiber network has helped transform Danville's economy after this former tobacco and textile town lost its traditional economic base. At one time Danville had the highest unemployment in the state of Virginia. Today it is attracting new jobs and new industries - and its open access fiber network plays a key role in business attraction and retention. It will be held on November 8th and 9th, 2012.

THIS IS THE FIRST conference of its kind in this country - an event devoted entirely to the relationship between a community's economic vitality and the presence of advanced broadband networks. Nations around the world have recognized this powerful linkage and responded to it - as have a growing number of communities in the United States. Each event in this new conference series will be held in a city with an advanced broadband system. Each event will have an impressive array of speakers whose mission will be to help attendees evaluate the options and opportunities and develop the optimal, affordable solution for their communities. The first conference is in Danville, Virginia - the Comeback City that bounced back from devastation with a visionary broadband strategy that's creating jobs and attracting the businesses and industries of tomorrow.

Learn how once-struggling towns and cities like Danville are successfully deploying fiber networks that serve their citizens today and position their communities for tomorrow while others struggle against seemingly intractable forces and financial challenges.

Topics and Themes Include:

DEVELOPING broadband strategies for the knowledge economy

WORKING with economic development agencies

DEVISING innovative financing methods

DEPLOYING broadband to help foster vibrant communities

OBTAINING government incentives and support

BUILDING advanced broadband systems

SHAPING regional strategies and solutions

DIFFERENTIATING your community with advanced broadband

COMPETING and cooperating in a high-bandwidth world

Conference Chairman: Jim Baller

The conference will be chaired by Jim Baller, President of the Baller Herbst Law Group and widely recognized for his expertise in communications and economic development. The FTTH Council called Baller "the nation's most experienced and knowledgeable attorney on public broadband matters."

Open Access Chairman and Conference Advisor: Andrew Cohill

Dr. Andrew Michael Cohill is president and CEO of Design Nine, a company specializing in municipal and community broadband planning and build outs. Dr. Cohill was director of the world-renowned Blacksburg Electronic Village at Virginia Tech, known as "the most wired community in the world." Design Nine has assisted dozens of communities with broadband planning, and the firm has more open access network experience than any other firm in the country.

Produced by Broadband Communities Magazine in partnership with the City of Danville.

The storm last Friday night on the East Coast caused such widespread power outages that it took down some cloud-based services, including Netflix. Some of the outages lasted as long as twenty-four hours, but in general, the cloud hosting providers got things back online quickly.

Here is the real problem: suppose your business is located in one of the areas where power won't be restored for a week. Your office has no power....for at least five business days.

Can you keep going?

Can you access all your cloud-based services via laptops?

Do you have a generator that you can use to power up your office?

If you have a generator, does it provide pure sine wave output so that all your cheap battery UPS devices don't keep flipping on and off?

Do your VoIP phones work?

Do you have network connectivity?

If your network provider is still up, how do you power up your local router?

Sitting in McDonald's and trying to run your business off laptops, along with sixty other business people, is not a plan.

If you were not able to attend the 2012 Broadband Communities Summit in Dallas a couple of weeks ago, you missed a great conference. With an increased focus on both community broadband and open access networks, there were a lot of really good, solid session, especially the five sessions on open access, which I helped to organize.

Here are some of the key ideas, concepts, and take-aways that I noted from the conference:

Micro duct vendor Teraspan noted that 2500 feet of day of microtrenching is easily possible in city streets.

Jim Salter of Atlantic Engineering gave a lively talk, and noted that communities could expect a 40% drop in telecom costs because of shared networks. He said telecom prices in the U.S barely budged because of duplicated networks.

Joe King, the City Manager of the City of Danville, Virginia, talked about the success of that community's open access, active Ethernet fiber network, which was started to spur economic development. The fiber has brought businesses back downtown, including international businesses and a commercial supercomputer facility.

The Grant, Washington Public Utility District deployed community fiber to help rural communities, and the combination of affordable power and affordable fiber has brought seven server farms/data centers to one community in the PUD service area.

The Grant PUD fiber network is open access, and has 23 providers offering a wide variety of services. The Metronet Zing network has 30 providers. This utterly refutes the idea that open access networks can't attract providers.

The open access Utopia network in Utah covers 25% of the state's population, making it the largest open access network in the country. And it has five different video providers on network.

The City of Eagan, Minnesota has found the combination of open fiber and a data center is powerful job attractor. And Eagan thinks community fiber is crucial to help preserve scare right of way.

Kate McMahon gave a talk on planning and noted that unless city and town planners update policies specifically to address modern right of management, local governments will continue to mis-manage right of way. She noted that many planners avoid the issue by claiming "that's not our policy," but don't work with elected officials to revise those policies.

Chris Mitchell noted that the supposed awfulness of community broadband "competing" with the private sector is a red herring argument, as many other muni services "compete" with the private sector, and no one complains about that--should libraries be closed because they compete with bookstores?

Rick Smith of the City of Cortez says they opened up their fiber to leverage the excellent quality of life in southwestern Colorado, noting that the fiber helps attract businesses and entrepreneurs to smaller towns.

David Shaw of Kirton & McConkie noted that three things are necessary for a successful community broadband project: political support, legal expertise, and excellent business and financial planning.

There was much much more, but those are some of the highlights. Start planning now to attend next year's conference.

If you are planning to attend the Broadband Communities Summit in Dallas next month, make your hotel reservations now, as the hotel is selling out. The conference was able to secure an additional block of rooms for the conference, but these are expected to be all gone next week. The conference is going to have a strong focus on community broadband, with tracks on rural broadband initiatives and open access broadband.

The popular Broadband Communities Summit (April 24-26, Dallas, Texas) has an extensive track of speakers and sessions devoted entirely to open access and community broadband networks.
Right now the conference is running an early bird registration special (http://bit.ly/wESDR8). A list of the Open Access sessions are below.

Business Planning and Open Access Networks
Open-access networks are built to support multiple providers that offer dozens or even hundreds of services. Instead of collecting revenue for two or three mostly low-margin services, network operators can accrue revenue directly or indirectly from every service offered to customers on the network. Though most of these will be niche services, many have high profit margins. This session will discuss key differences in open-access network architecture, introduce alternative business models and show how those business models can create attractive opportunities for service providers.

Modern Right of Way Management
A community’s rights of way constitute a valuable asset that it can use for economic development and revenue enhancement. Too often, city officials manage this asset in a reactive way, simply responding to requests from telecom providers and other utilities for right-of-way use. Find out how leading-edge communities proactively plan and manage right-of-way usage in order to attract ultra-broadband providers, encourage economic development and fully exploit their assets.

Case Studies: Success Stories for Open Access
The first open-access networks in the U.S. were launched into uncharted waters – no one knew whether or how they would work from a business or technical standpoint. Those starting out today can benefit from the experiences of the pioneers and choose strategies that have been proven successful.

Technology for Open Access
Though most fiber-to-the-premises networks can be configured to support multiple service providers, there are preferred ways to design networks specifically for open access. Learn about new technologies for all aspects of deployment and operation – ranging from conduits to optoelectronic equipment to solutions for network management and provisioning – that have been specifically designed to make open-access fiber networks cost-effective, manageable and easy to implement.

Open Access Fiber and Economic Development
Many of the middle-mile fiber networks being constructed today are open to multiple providers - some of them, though by no means all, because of requirements imposed by government funding. In this session, deployers and operators of middle-mile networks will share what they have learned, from both a technical and business standpoint, about making open access work in the middle mile.

Do it Yourself Fiber – Creative Approaches to Organizing, Financing and Building FTTH Networks in Rural Areas
Rural communities that have been bypassed by both private and public broadband programs are left to their own devices when it comes to obtaining broadband. Some are now proving adept at what might be termed do-it-yourself or “crowd-sourced” broadband strategies. This session will present case studies of rural coalitions – ECFiber in Vermont and B4RN in northern England – that rely heavily on local resources to raise capital, organize projects and even deploy fiber. Can these new models make FTTH practical and affordable in rural settings?

The City of Danville, Virginia is beginning to see some big wins with their steady expansion of the City-owned open access fiber network. Back in the early 2000s, the City Utilities Department had begun installing fiber on City utility poles. Danville Utilities provides electric power throughout the City and large portions of three surrounding counties, with a total service area of nearly 500 square miles, and the fiber was an early smart grid initiative that provided the Utilities Department with better management of substations and power use.

In 2006, the City retained Design Nine to help develop a business plan and network architecture that would open the City fiber to commercial use. This led to the first municipal open access fiber network in the U.S. in 2007, and was arguably the first Gigabit municipal network; true Gigabit circuits were available on day one of operations--the nDanville network is active Ethernet.

Funded with revenue from anchor tenants like the City and the K12 schools, the network has expanded slowly, but from the beginning, the fiber network was part of a larger economic development strategy to re-invent the City, which had seen the loss of thousands of textile jobs in the late 90s. nDanville fiber has sharply reduced costs for connected businesses, especially in the medical community, and a commercial supercomputer facility is coming online in downtown Danville--the location determined in large part by where nDanville fiber is available.

Apple's announcement yesterday of an improved iBooks application for iPads and iPhones may seem like a kind of ho-hum sort of thing, but it is potentially as big a deal as the introduction of the iPod was a few years ago. Remember that there were all sorts of digital music players on the market prior to the introduction of the iPod; they were uniformly awful to use. The iPod set a very high bar for usability that resonated with customers.

The iBooks announcement was less about the bookshelf app itself than about the accompanying application called iBooks Author. Apple is giving this application away for free, and it sets a new standard for the ease of creation of ebooks. iBooks Author makes it much easier for textbook authors particularly to embed multimedia content in an ebook.

Apple has cleverly paved the way for the sale of millions of iPads that will replace conventional textbooks in both K12 schools and in higher education.

But while that is interesting and brilliant, it's not the real story.

The real story is that iBooks Author allows writers and teachers to create ebooks and sell them directly through the iBooks store without the services of a publisher. Uh oh. Text book publishing is extremely lucrative, with very high prices for the books, and very low royalties paid to the actual authors of the books. Now, text book authors can, albeit with a bit more work, cut out the publishers completely and reap much larger income by selling directly to students via Apple's iBooks service.

Design Nine has been selected as a Broadband Properties / Broadband Communities top 100 company from 2008 to 2015.

Designed by Design Nine, the nDanville fiber network has won the Intelligent Community Forum's Smart 21 award for 2010.

Design Nine provides visionary broadband architecture and engineering services to our clients. We have over seventy years of staff experience with telecom and community broadband-more than any other company in the United States.

We have a full range of broadband and telecom planning, design, and project management services.